Seven-year tariff plan brings electricity cost surge for Karachiites

ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) has approved a multi-year tariff (MYT) for K-Electric for the fiscal years 2023 to 2030.

The new seven-year tariff has allowed the power utility that supplies electricity to Karachi to collect over Rs43 billion under the head of “use of system charges”.

Under this regime, K-Electric consumers will see an average increase of Rs3.31 per unit in electricity prices.

According to NEPRA, K-Electric’s distribution system has been set a revenue target of Rs50.284 billion for the fiscal year 2024–25, while Rs43.447 billion has been approved in use of system charges revenue.

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These charges are expected to have an average impact of around Rs3.30 per unit for consumers.

However, NEPRA clarified that this decision will not impose any additional burden on current electricity bills, as billing will continue under the country’s uniform tariff policy.

NEPRA also reviewed K-Electric’s request for Return on Equity (RoE). The company had sought a 16 per cent RoE for its distribution segment, but NEPRA approved 14 per cent.

Similarly, for the transmission segment, 12 per cent RoE was approved against the requested 15 per cent.

NEPRA further noted that the financial approvals granted to K-Electric are subject to change if the company fails to obtain formal approval for the execution of its investment plans.